More and more software development companies and traditional enterprises are outsourcing their software engineering processes to external vendors. Depending on the company needs and strategy, they can work with nearshore or offshore vendors, but in either case building an external Center of Excellence is a great alternative to in-house hiring, and the long recruiting and onboarding cycles it brings with it. During a global lack of engineering talent, outsourced software development services can help businesses expand around the world quickly, reduce development costs and time to market. Having development teams at strategic points can make the company more competitive and efficient.
Waverley Software has development teams in North and South America, Europe and Asia. Over our +30 years in the market the company has built a solid team of more than 350 trained professionals with enough experience to meet the needs of customers in various verticals. Having worked with software developers in Bolivia, Colombia, Mexico, Poland, Romania and many other countries, the company knows what it takes to build successful teams and how to pick the best countries to outsource software development.
What makes a country good for outsourcing?
There are many reasons why a country may or may not be a suitable candidate for companies to outsource their software development services. For example, Latin America, which is the third most popular place to outsource software services, is characterized by its highly talented staff and by breaking language and time gaps for North American clients However, the business hours overlap with Europe is too small, which makes it not a good match for European companies that prioritize being in touch with their team for as long as possible. Therefore, we recommend choosing vendor destinations based on your company’s priorities, team structure, processes, etc.
Here we present a list of the reasons that should be taken into account to categorize a country as a “good option” to outsource:
- Time difference between countries. Would you like your team to work in the same timezone as you? Or would you like them to support the product when your in-house team is not available? Or would you prefer to have a cross-geo team for a 24-hour development cycle?
- Cost reduction or rates levels. How cost-sensitive are you? Do you have any budget limitations? High-quality engineering services cost appropriately, but still are way cheaper than hiring engineers locally in the US. Our recommendation is to look not at the rate itself, but at value for money (“story points per dollar”). Cost of life and taxes differ from country to country, and should also be taken into account.
- Good communication skills (English level). Wherever the team is located, excellent English skills of at least their Team Lead, Project Manager and Account Manager is a must.
- Tech education level & market size. How rare is your technology stack? Is it common and easy to find in this or that destination? The country’s market size determines how easy it will be to scale your team in the future.
- Resources availability & ramp-up time. In some countries, it is customary to give a 6-week notice period and no less, so it may take some time before your team can finish their previous project and move on to yours.
Top 10 Software Outsourcing Countries
Once the above factors have been taken into account, here we present a list with the most important data for each country that we consider to be the best option for outsourcing. We tried to analyze the most popular software outsourcing destinations and reasons for their popularity.
More than 255k specialists in the field of software development graduate annually in Poland, making it one of the favorite destinations of both US and EU-based customers, for whom it is critical that the team are EU-citizens. Poland is also among countries with the best command of English, in fact, it is 13th with a score of 600 points. This aspect is very advantageous since it allows having more fluid communication with all the multinationals that decide to subcontract in this country. Engineers are characterized by their mastery of these programming languages: Python, Ruby, Java, and .NET. In addition, the time difference between the subcontracting countries and Poland allows for sufficient business hours overlap. There is only one time zone (UTC +1) and the rates per hour are very favorable.
The technology business in Mexico grew by 9.6% in the first quarter of 2022. And no wonder, the country is doing a lot to encourage all sorts of outsourcing in Mexico. Clients from the US often reach out to outsourcing companies from Mexico for these reasons:
- Geographic proximity. Mexico is easy and fast to travel to from the US.
- Time zone convenient for US clients (GMT -6)
- Excellent English skills and cultural proximity to the US
German business newspaper Handelsblatt published an article highlighting Vietnam’s potential to become a world-leading information technology hub, with many quality universities and qualified young human resources. This country has more than 430k software developers who can program in Java, Node.JS, PHP, React, HTML5 as their main technologies. Also, Vietnam ranks 60th out of 111 English-speaking countries. Their rates per hour are similar to those of other Asian countries ($40-50) and the optimal time zone match for Vietnamese engineers would be to work with Australia and New Zealand.
Becoming “An Asian Silicon Valley” is one of the main objectives that the Taiwan government has decided to meet for this year. This island is making its IT specialists known as trained professionals and hard workers in the following programming languages: Java, PHP, Ruby on Rails, ASP.NET Core, in addition to being in position 40 in terms of English Proficiency out of 80 countries. Their rates per hour are around $30–40, making local engineering services quite affordable for price-sensitive clients.
The country’s initiative to be a technological powerhouse has made it rank 42 out of 50 in the list of countries with the most promising technological future as they have invested in Egypt STEM Schools and similar projects to increase their production of IT specialists. In addition to being an accessible country from the economic standpoint ($40-30 per hour), Egypt has a relatively small time difference (GMT +2) with Western Europe, and a relatively high level of English proficiency on the African continent (11 out of 20).
India can easily top any list of the best countries to outsource software. This is thanks to their mass production of IT specialists, over 4.4 million software engineers capable of handling Python, Java, PHP and HTML. And it is important to mention that this number is growing yearly since more than 2 million graduates in the technological branch receive STEM degrees annually (Science, Technology, Engineering, Math). According to the English proficiency score, it ranks 6 out of 24 in the Asian continent. However, the most attractive aspect in working with Indian developers is low pricing that starts from $6 per hour.
10. Czech Republic
Java, PHP, C, C++, C#, Python, Ruby on Rails, and Swift are the most common programming languages for the 100k+ IT specialists in the Czech Republic. Similar to India, the Czech educational system is based on STEM and annually adds around 15k software engineering students to the talent pool. The Czech people’s English skills have helped this country rank 19 out of 35 in Europe. Regarding the time difference (GMT +1), it’s a great match for Western European clients, as well as US customers who don’t mind just a half-day overall in business hours as long as the quality of deliverables is high and the prices are lower than in the US (here they’re between $40 and $60 per hour).
Bonus: Up-and-Coming Outsourcing Destinations
There are a couple more countries that haven’t been as popular as the previous ones, but given the enormous potential they demonstrate, we consider them worthy of being featured in the list. Let’s call them “ the emerging outsourcing markets”.
Colombia, Argentina and Brazil
These Latin countries have shown to have great technological potential, especially for the US and Canadian customers (their time zones range from GMT-3 to GMT-5).
Together, they are home to around 700k software specialists and that number is increasing annually (62k in Colombia, 134k in Argentina and 500K in Brazil). They are familiar with the most popular programming languages (Argentina: Java, Python, SQL. Colombia: Scala, Swift, Kotlin, Go, Ruby. Brazil: Java, Python, SQL). With affordable rates ($30-50 per hour), a wide and growing talent pool, solid English skills and hard-working, conscientious culture, these destinations should definitely be considered when looking for vendors to outsource your software development projects.
The best option to quickly expand your company at strategic points and optimize costs at the same time is definitely outsourcing. The distance, the language and the time zone differences between the countries are definitely factors that impact the company’s choice of vendors. Today, there are many trained engineers around the world who can meet the expectations of many customers and solve their problems quickly, effectively and efficiently. So, which country would you choose?